Renovate Home
Guide to Financing a Renovation

If you own or have found a home that needs a little (or a lot) of TLC, PrimeLending has the financing you need to make your “perfect home” dream come true. A home renovation loan allows you to roll the costs of repairs or upgrades into refinancing your current mortgage, or into the mortgage for the home you buy. Benefits include:

  • One Loan: The loan covers the purchase or refinance amount, plus renovation costs
  • Faster Finish: Renovation work can begin immediately after closing/funding
  • Simplicity: Just one application, one closing, and one monthly payment

Discover different types of loans for home renovations and what you need to know before you start your project.

Renovation Loans 101

Before you renovate, it's important to know how the process works, which renovation loan options are available and how you can benefit most. Check out our mortgage terms video that covers what you need to know about renovation loans.

Remodeling Construction Loans Can Make Your Current Home Like New Again.

PrimeLending remodeling home loans can help you turn a home you like into a home you love. If you’re living in an older home that is now too small, needs repairs, remodeling or upgrades, PrimeLending home remodeling loans are a type of refinancing loan that let you roll the costs of the work you do into your new mortgage. This helps make it easier to afford the repairs or upgrades without getting a separate loan, likely at a higher interest rate. You’ll still have just one simple mortgage payment. And in most cases, because you’re refinancing, you could likely end up with a lower interest rate, a shorter term, or possibly even lower monthly payments.

Types Of Loans For Home Renovation

Whether you want a new kitchen, need to add on more space or are buying a fixer-upper, we have more than 15 home renovation loan options to help you get the job done. Some popular home loans for renovation include:

  • FHA 203K Renovation Loan—Backed by the Federal Housing Administration (FHA) these loans can help refinance or buy homes that need updates or repairs and offer lower down payments.
  • VA Renovation Loan—A reno loan backed by the Department of Veterans Affairs (VA) offers all the savings of a VA loan with the convenience of one application, one closing and one monthly payment.
  • EZ “C”onventional—This is a renovation home loan option that can help you make small cosmetic, non-structural upgrades to your home over a short period of time.
  • Repair Escrow—This home renovation loan is an escrow account that sets aside funds to pay for renovations to your property.
  • Pool Escrow—Available on conventional and jumbo loans, a pool escrow is an account with dedicated funds to cover the costs of pool construction.
  • Fannie Mae Homestyle®/Freddie Mac CHOICERenovation MortgageSM—Backed by Fannie Mae and Freddie Mac, respectively, these renovation loans can help finance your interior and exterior home remodeling projects.

What Home Renovation Loans Can Do

PrimeLending home renovation and remodeling loans will let you do almost anything with your home. Some of the loans are designed specifically for smaller projects like ordinary repairs and cosmetic changes. They are very versatile with no minimum loan requirements for the repairs or upgrades you want to make but are limited to non-structural repairs with maximum loan amounts around $30,000. Your project can include things like:

  • Replacing or upgrading your plumbing, electrical, heating or cooling systems
  • Insulating your home for greater energy-efficiency
  • Repairing or replacing your roof and gutters
  • Refinishing or waterproofing a basement
  • Getting new windows, doors or floors
  • Redesigning your kitchen or bath
  • Landscaping or adding a deck
  • Buying new appliances
  • And much more

There are other types of remodeling construction loans that are specifically intended to make major repairs or changes to the home. These do have minimum loan amounts but allow you to borrow up to the value of your property, plus the repair costs. Qualifying projects include:

  • New construction, like room additions or adding a second floor
  • Major remodeling that requires structural changes
  • Foundation or other structural repairs
  • Repairs or improvements that take over six months

We even offer special loans for making weather- and storm-related repairs or adding a swimming pool.

Take a look at all your PrimeLending renovation and remodeling loan options here.

Renovation Home Loans To Help You Buy And Personalize A New Home.

If you’re open to the idea of buying a fixer-upper, our loans for home renovation can help with that, too. They allow you to combine the purchase price of the home and the cost of repairs or upgrades into a single mortgage. That way, you don’t have to take out a second loan after the purchase, likely at a much higher interest rate. And you can start repairs immediately after closing. Additional benefits include:

  • You could buy a home in a great location at less than market price
  • Getting a bargain-priced home could allow you to move into a more expensive area
  • You may be able afford a larger home than you imagined
  • You’ll have more choices when searching for homes and areas to live
  • You’ll live in a home customized to your exact needs and tastes

Another great benefit is these loans cover required repairs to bring a home up to minimum standards, comply with city or community codes, or satisfy appraisal requirements. The types of defects or other conditions that are often discovered during home inspections.

Does a Fixer-Upper Make Sense for You?

While there are many savings and other advantages to buying a fixer-upper, they can also turn out to be cost prohibitive. Here are some considerations you should take into account before you make the investment in this type of home.

Check local zoning regulations: Cities and towns have zoning requirements and restrictions. Find out what you can and cannot do with the home you want to buy.

Have the home inspected: An essential step for all new home loans, this will give you an assessment of what shape the home is in and what needs to be done.

Estimate repair costs before making an offer: Show a contractor the inspection report and the house, then ask for a written estimate for the repairs. If you’re planning to do some of the work yourself, don’t forget the cost of supplies and materials.

Try to get a price break: A home that needs a lot of work could get you as much as a 20-40% discount on the purchase price. Take into account the time, money and hassle of doing the renovation when you make an offer.

Choose the right type of loan: PrimeLending offers different types of remodeling home construction loans intended for different types of projects – from major structural repairs to cosmetic remodeling or upgrades. Talk to a home loan expert to make sure you are getting the right loan for your needs.

Determine if you can do any of the work yourself: Having the skills (and the time and patience) to do some of the work for yourself can save you a lot of money, plus give you a great sense of pride and accomplishment.

How to Choose a Remodeling or Renovation Contractor for Your Project.

When you’re ready to start your home remodeling project, there are some important steps to take to ensure you hire a contractor who will meet your standards and complete the work correctly. Below are some tips to help you choose a qualified contractor.

Check every contractor’s credentials: Use the internet to find contractors in your area with positive ratings. Ask friends, neighbors and people you trust for recommendations.

Ask for written estimates: Get at least three from three different contractors. Make sure they’re all for the exact same work.

Ask if they are licensed: This will mean they’ve passed a test or are certified to perform the work they do.

Use contractors who are insured and bonded: This protects you if something goes wrong during the project or if they don’t complete the work.

Ask to see their work and referrals: Request to see some of their past or current work, and to interview their customers.

Chose contractors who specialize: Contractors and subcontractors who say they can “do it all” might not be as good as someone who’s a skilled expert in a particular area.

Pay attention to their attitude and professionalism: Don’t hire anyone who refuses to answer any of the above questions or doesn’t meet the above conditions. Legitimate, reputable contractors will be happy to provide all this information.

Whether the home you own or want to buy needs major repairs like a new roof or foundation repairs, or smaller cosmetic changes like a kitchen update, new floors or a fresh coat of paint, PrimeLending remodeling construction loans can help make it simple and affordable.